Once you have narrowed your search to three contractors, it's time to further define the project and the costs. Ask the contractors to provide bids based on a detailed list of the work you want completed and the types of materials to be used. A bid is a legal offer to do a specific job for a fixed amount of money. It is important to include as much detail as possible so the bids will be based on the same specifications.

Each bid should include a work write-up and specifications that describe all of the work that will be done and how much it will cost. It is very important that the contractors specify which type, brand, and/or grade of material they will be using so that you pay for the quality you requested. The bids should include a detailed description and, if appropriate, a drawing of the work and the time required to complete the project. The contractor should specify that all materials and procedures will comply with any applicable building code requirements. Check to ensure the rooms are drawn to scale and all proposed changes are noted.

As you review the bids, resist the urge to select a contractor based solely on price. The lowest bid, for example, may include materials that are of substandard quality or an unrealistic projection of the number of hours the work will require.

If bids vary significantly from one contractor to another, ask for an explanation. If the bids exceed your budget, ask the contractors for suggestions on trimming the costs. Can you scale back the scope of the project and still achieve your goals? Do you have the skills necessary to complete part of the work yourself?

Select the bid that best reflects your vision for the project and the type of contractor you want to work with. This contractor will become a familiar face around your house for the duration of the project.

© 2003 Fannie Mae. All rights reserved.

More Information On Home Building

CONSTRUCTION TO PERMANENT LOANS
STEPS TOWARDS CONSTRUCTION LOAN PLANNING
SELECTING A CONTRACTOR
CONTRACTING WITH YOUR BUILDER